THE Straits Trading Company is selling one of its industrial properties in South Australia for A$52.7 million (S$46.3 million) – an amount that is more than A$10 million below an independent valuation.
Disclosing this on Friday (Apr 5), the conglomerate-investment company said the purpose-built modern distribution facility in Adelaide – 34 Share Street, Kilkenny – was valued by CBRE Valuations at A$64.3 million, as at Dec 31, 2023.
The valuation is based on the capitalisation and discounted cash flow methods.
The group said the proposed sale is in line with its stated strategy of redeploying capital from its existing property portfolio of high quality but low yielding investment properties into potentially higher return real estate opportunities via its unit, Straits Real Estate.
It said it has “consistently articulated” this strategy to shareholders.
Meanwhile, it said the A$52.7 million consideration was arrived at after arm’s length negotiations, on a willing-buyer and willing-seller basis, taking into account the property’s valuation, and will be paid in cash on the sale’s completion.
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The proposed sale is not expected to have a material impact on the earnings per share and net tangible assets per share of the group for the financial year ended Dec 31, 2023, the group stated, adding that it will not have any impact on the issued share capital of the company.
Shares of Straits Trading closed down 0.7 per cent at S$1.44 on Friday, before the announcement.
